Steve writes editorials for each issue of Forbes under the heading of “Fact and Comment.” A widely respected economic prognosticator, he is the only writer to have won the highly prestigious Crystal Owl Award four times. The prize was formerly given by U.S. Steel Corporation to the financial journalist whose economic forecasts for the coming year proved most accurate.

In both 1996 and 2000, Steve campaigned vigorously for the Republican nomination for the Presidency. Key to his platform were a flat tax, medical savings accounts, a new Social Security system for working Americans, parental choice of schools for their children, term limits and a strong national defense. Steve continues to energetically promote this agenda.

Margaret The Magnificent: We Desperately Need More Leaders Like Her

Along with Ronald Reagan and Pope John Paul II, Margaret Thatcher was a giant of our era and, indeed, of history. These three leaders brought about the fall of Soviet communism and the resurgence of political and economic liberty around the world. Like Reagan, Thatcher was one of those rare individuals who were both a movement leader and an effective political leader. It’s one thing to have firm ideas, quite another to have the skills to bring them into being and for them to endure after you leave office.

The current economic crisis has brought Margaret Thatcher’s ideas and ideals under siege, even though this disaster resulted from ignoring her, and Reagan’s, fundamental free-market principles.

Thatcher’s rise was astonishing. The notion that a grocer’s daughter could become leader of the Conservative Party and prime minister in class-ridden Britain seemed preposterous. In business, outsiders are usually the ones who radically shake up an existing industry or create an entirely new one. But in politics it takes a severe crisis for an outlier to emerge. Though he had a pedigreed background, Winston Churchill was very much the outsider, intensely distrusted and disliked by his own party and much of the public. Only when Britain’s very existence was at stake was he able to reach the summit. In Thatcher’s case it was an acute economic and social crisis that enabled her to emerge.

It’s hard to appreciate today how desperate Britain’s condition was before Thatcher took office. Its economy was a laughingstock, the perennial sick man of Europe. Strikes were endemic, and union bosses, in effect, governed the country. Thatcher’s Conservative Party had long ago made its peace with the welfare state and the ethos of high spending and high taxes. While the previous Tory prime minister, Edward Heath, wanted to revive Britain, he hadn’t a clue how to do it. In a make-or-break showdown with the National Union of Mineworkers, Heath called a general election under the banner, “Who Governs Britain?” He lost.

Great leaders have an astute sense of knowing when to take advantage of circumstances. Even though Heath had lost two elections, none of the senior party officials would challenge him. At the time Thatcher wasn’t regarded as one of the party’s major figures. But she was just about the only Tory who firmly believed in free markets and in Britain’s ability to again become a proud nation based on the principles of liberty. She was a devotee of the idea of paring back big government to give free enterprise room to flourish. Astonishingly, she beat Heath in a leadership fight in 1975 and led the Tories to victory in 1979.

During the campaign Thatcher exhibited that critical sense of timing. She vowed to honor already agreed upon pay settlements for nurses. This led some to think she didn’t have the backbone needed to turn Britain around, but she was exhibiting a great politician’s sense of knowing when to pick a fight. Thatcher eventually pushed through major labor union reforms. Shortly after she won reelection the coal miners’ union, which had destroyed Heath, decided to take her on. But, unlike Heath, Thatcher was fully prepared, beating the union resoundingly; a defeat from which it never recovered.

Thatcher also immediately began to slash income tax rates, rein in galloping spending and fight inflation. But one of her greatest innovations was the systematic selling off of government assets, dubbed “privatization.” After World War II Britain nationalized enormous swaths of the economy, actions that subsequent Conservative governments left largely untouched. Thatcher sold off government companies, and her example has been followed by countless nations around the world.

In the area of privatization Thatcher did two remarkable things. She pushed to sell much of Britain’s public housing, in which an enormous number of Britons lived, to occupants at low prices and on very advantageous terms. This was the beginning of her shifting people’s mentality and dependence on government. Her other smart move came in the privatization of government-owned companies when she offered a significant number of company shares to workers at very low prices. Union leaders hated privatization, but their opposition was undermined as members realized they could do very well by buying cheap shares in these newly privatized entities. Here again, Thatcher was changing people’s thinking, with workers taking on a more capitalist mentality.

Before Thatcher, many social observers thought Britain had an ingrained and unchangeable anticommercial culture, which would stand in the way of the country’s ever becoming an economic success. Yet within a decade of her taking office Britain had the most vibrant large economy in Europe, one even more dynamic and innovative than Germany’s. London became a magnet for entrepreneurs from France, Sweden and elsewhere.

One unchangeable characteristic of a great leader is the courage to take career-breaking risks when necessary. Thatcher demonstrated her mettle when Argentina’s military dictatorship seized Britain’s Falkland Islands. Defying almost the entire political establishment, which was haunted by both Britain’s military weakness and the memory of the Suez Canal debacle in 1956, Thatcher declared that the seizure would not stand and that Britain would go to war to take the islands back. She received critical help from the U.S., thanks in large part to the unrelenting efforts of Defense Secretary Caspar Weinberger (who years later became publisher and chairman of FORBES). Britain’s military expedition succeeded. The dictatorship fell, and democracy was restored in Argentina. For Britain the Falklands war was a huge boost to a demoralized nation. To the world it meant that tyranny would be resisted.

I met Margaret Thatcher several times during her reign at 10 Downing Street, including during, what was for me, a memorable interview in 1986. Most interviews with politicians are a useless exercise, as they know what they want to say and that’s all they usually do say. But Thatcher didn’t mind mixing it up verbally.

After she left office I got to know her on a personal basis. She visited us several times on vacation, and she was as impressive in private as she was in public. She was unfailingly gracious to everyone she came across. She had a keen intellect and was an indefatigable reader. She loved a verbal joust but was also a very warm and generous-hearted individual. She and her husband, Sir Denis, were clearly devoted to each other.

Margaret Thatcher was loyal to friends. I will be forever grateful for the help she provided when I ran for the Republican presidential nomination in 2000. She didn’t feel it proper to overtly endorse me, but she made it quite clear who her preference was by having me at her side as she praised me when she addressed a major Iowa fundraiser for local candidates in 1998. She was a wonderful mentor, and I only wish I had been a better student!

The heads of major nations today, sadly, are reminiscent of those from the pre-Thatcher, pre-Reagan era. May the memory of these two remarkable individuals–both of whom were motivated by a deep belief in the principles of liberty–inspire the successors to today’s lackluster and destructively misguided leaders.

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